Suit Puts Brakes On Elgin Bus Barn

A lawsuit against Elgin School District 46 is jeopardizing a $2.9 million financing agreement to build a major school bus facility in the city, district officials say.

A $2.9 million installment purchase contract is due to close Monday, but the financing cannot go through if there is pending litigation, they say. The lawsuit was filed by a group of homeowners who want to keep the facility out of their neighborhood.

The financing can`t be postponed because that would void the contract, said Linda Bobert of Banc One Capital Corp., bond consultant for the school district.

Besides, the current financing carries a favorable 7.49 percent interest rate because it was negotiated earlier this year, Bobert said. Had the purchase contract been written last week, rates would have been 7.6 percent to 7.7 percent, said Bobert, who added, ``Rates are on the rise.``

If the agreement does not go through, ``basically we would have to start from square one,`` said District 46 Supt. Richard Wiggall.

A spokesman for the homeowners group, Citizens Against the Bus Barn, said they don`t intend to drop the suit, despite the threat of a countersuit by the district asking for court costs and damages.

``We`re scared to death,`` said Pam Swanson, president of the group.

``When Goliath saber rattles like that, you get scared. . . . (But) we`re not backing down because we feel threatened. . . . We believe we`re in the right.``

The 36,000-square-foot bus barn and a parking lot with a capacity for 226 buses is scheduled to open for the 1991-92 school year on 16 acres on Shales Parkway on Elgin`s east side. The site is next to the Summerhill and Parkwood Farms subdivisions, which contain about 600 homes.

Area residents are concerned about fighting their way to work with more than 200 buses entering Shales in the morning, as well as the impact the facility could have on the environment and property values, Swanson said.

According to school district lawyer Patricia Whitten, the suit hinges on an unclear part of the Illinois School Code.

One part of the code says that to build for school purposes, a referendum must be held unless the financing comes from the sale of other buildings or property or from gifts or donations, said Kim Knauer, spokeswoman for the Illinois State Board of Education.

However, another part of the code says school districts can build office buildings without a referendum, if they are purchased on an installment basis, Whitten said.

Chapman & Cutler, a Chicago law firm and the district`s bond counsel, says the bus facility can be financed under this part of the code, Whitten said. ``Maybe this case will clear it (the law) up,`` Whitten said.

The citizen`s group went to Kane County Circuit Court last week seeking a temporary restraining order to stop construction. Although Judge James Quetsch didn`t grant the order, he said the denial did not indicate a lack of merit in the plaintiffs` case, Swanson said.

The problems faced by the school district are more than just rising interest rates. The district has buses located in several areas because there isn`t room in its facility behind Ellis Junior High School. That bus complex was built in the 1950s and can house 50 buses.

According to Whitten, there are one or two bus parking spots that the district will have to vacate Oct. 1, when the new bus facility was scheduled to be completed.

Also, the district has already entered into contracts with Sinnett Builders, and a delay could cause increased construction costs, Whitten said. A court date is scheduled for April 16 in Geneva.